Here’s How to Compute Your Holiday Pay

by Venus Zoleta, on category "Personal Finance"

June 28, 2019


Holiday Pay Rules and Computation Philippines | Moneymax

As an employer, do you observe the holiday pay rules as mandated by the Labor Code of the Philippines?

If you’re an employee, are you paid correctly for work you’ve rendered on a holiday?

It’s important to know how to compute holiday pay in the Philippines. For employees, it ensures they’re compensated fairly for working on a holiday. For employers, it ensures compliance with the law and prevents salary disputes from employees.

Here’s everything you need to know about holiday pay rules in the Philippines.

What is Holiday Pay?

What is Holiday Pay?

Photo by Marco Verch via Flickr, Creative Commons

Holiday pay is the amount that eligible employees in the private sector receive—whether they worked or not—on a regular or special non-working holiday.

Under the Philippine Labor Code, employees covered by holiday pay rules should receive at least 100% of their salary even if they did not report for work, as long as they’re present on the workday or on paid leave on the day immediately before the holiday.

Are All Employees Entitled to Holiday Pay?

Not all employees in the Philippines are entitled to holiday pay.

You’re exempted from receiving this government-mandated benefit if you belong to any of the following groups:

  • Workers for retail and service companies with less than 10 regular employees
  • Managerial employees
  • Managerial staff members and officers
  • Government employees
  • Kasambahays
  • Employer’s family members who are dependent on the employer for support
  • Employees engaged on task, contract, or purely commission basis

How to Compute Your Holiday Pay

How to Compute Your Holiday Pay Philippines

The Department of Labor and Employment (DOLE) enforces two different sets of holiday pay rules in the Philippines: one for regular holidays and another for special non-working days.

Holiday Pay Rules for Regular Holidays

Here are the holiday pay computation rules that apply to the following regular holidays:

  • New Year’s Day – January 1
  • Araw ng Kagitingan – April 9
  • Maundy Thursday – Varies per year
  • Good Friday – Varies per year
  • Labor Day – May 1
  • Independence Day – June 12
  • National Heroes Day – Last Monday of August
  • Bonifacio Day – November 30
  • Christmas Day – December 25
  • Rizal Day – December 30
  • Eidul Fitr – Varies per year
  • Eidul Adha – Varies per year

Computation of Holiday Pay for Employees Who Didn’t Work

If you didn’t report for work on a regular holiday, you’ll still receive your full salary for that day. You shouldn’t be deducted for work that isn’t performed on a holiday.

Computation of Holiday Pay for Employees Who Worked for 8 Hours

If you reported for work on a regular holiday, you should be paid double your salary (basic wage + cost of living allowance or COLA) for the first eight hours worked.

Here’s how to compute your holiday pay:

Pay for work on a regular holiday (first eight hours) = (Basic wage + COLA) x 200%

For example, if your daily rate is PHP 1,000, your holiday pay should be calculated as follows:

PHP 1,000 x 2 = PHP 2,000

Computation of Holiday Pay for Employees Who Worked Overtime

If you worked for more than eight hours during a regular holiday, you should be paid an additional 30% of your hourly rate.

Regular holiday pay with overtime work = Hourly rate x 200% x 130% x number of hours worked

Let’s say your hourly rate is PHP 125, and you worked overtime for two hours (for total overtime of 10 hours). Here’s how to calculate your regular holiday pay:

PHP 125 x 2 x 1.30 x 10 hours = PHP 3,250

Computation of Holiday Pay for Employees Who Worked for 8 Hours During Their Rest Day

If you worked during a regular holiday that also falls on your rest day, you must receive 30% of your 200% salary in addition to 200% of your salary.

Use this formula for a simpler computation:

Holiday rest day pay = [(Basic wage + COLA) x 200%] + [30% (Basic wage x 200%)]

For a daily rate of PHP 1,000, the holiday rest day pay is computed as follows:

[(PHP 1,000 x 2)] + [0.30 (PHP 1,000 x 2)]

[PHP 2,000] + [0.30 x PHP 2,000]

PHP 2,000 + PHP 600 = PHP 2,600

Computation of Holiday Pay for Employees Who Worked Overtime During Their Rest Day

If you worked for more than eight hours on a regular holiday (which is also your rest day), you’ll get paid an additional 30% of your hourly rate.

Holiday rest day pay = Hourly rate x 200% x 130% x 130% x number of hours worked

Here’s how to compute your holiday pay with overtime on your rest day:

PHP 125 x 2 x 1.30 x 1.30 x 10 hours = PHP 4,225

Holiday Pay Rules for Special Non-Working Days

Holiday Pay Rules and Computation Philippines

Here are the holiday pay computation rules that apply to the following special non-working days:

  • Chinese New Year – Varies per year
  • EDSA People Power Revolution – February 25
  • Black Saturday – Varies per year
  • Ninoy Aquino Day – August 21
  • All Saints’ Day – November 1
  • All Souls’ Day – November 2
  • Feast of the Immaculate Conception of Mary – December 8
  • Christmas Eve – December 24
  • Last Day of the Year/New Year’s Eve – December 31

Computation of Holiday Pay for Employees Who Didn’t Work

The no work, no pay rule applies when you don’t report for work on a special non-working day, unless your employer has a policy or collective bargaining agreement (CBA) that requires payment on such a holiday.

Computation of Holiday Pay for Employees Who Worked for 8 Hours

If you work during a special non-working day, you must receive an additional 30% of your basic wage on the first eight hours worked.

Here’s how to compute your holiday pay:

Pay for work performed on a special non-working day = (Basic Wage x 130%) + COLA

If your daily rate is PHP 1,000 (no COLA), your holiday pay is computed as follows:

PHP 1,000 x 1.30 = PHP 1,300

Computation of Holiday Pay for Employees Who Worked Overtime

If you worked overtime, you’ll get an additional 30% of your hourly rate.

Pay for work performed on a special non-working day with overtime = Hourly rate of the basic wage x 130% x 130% x number of hours worked

With an hourly rate of PHP 125 and two hours of overtime work, here’s how to calculate your pay during a special non-working day:

PHP 125 x 1.30 x 1.30 x 10 hours = PHP 2,112.50

Computation of Holiday Pay for Employees Who Worked for 8 Hours on Their Rest Day

If you worked on a special non-working day that also falls on your rest day, you’ll get an additional 50% of your basic wage for the first eight hours.

For a simpler computation, use this formula:

Special non-working rest day pay = (Daily rate × 150%) + COLA

For a daily rate of PHP 1,000 (no COLA), your holiday pay is computed as follows:

PHP 1,000 x 1.50 = PHP 1,500

Computation of Holiday Pay for Employees Who Worked Overtime on Their Rest Day

If you worked overtime on a special non-working day (which is also your rest day), you’ll get paid an additional 30% of your hourly rate.

Special non-working rest day pay with overtime = Hourly rate of the basic wage x 150% x 130% x number of hours worked

Here’s how to compute your holiday rest day pay with overtime of two hours:

PHP 125 x 1.50 x 1.30 x 10 hours = PHP 2,437.50

Final Thoughts

Holiday pay rules exist to protect the rights of workers to compensation that’s due them. Employees must scrutinize their payslips and report to the HR or Accounting Department any incorrect holiday pay computation. For their part, employers should make sure they compute their employees’ holiday pay correctly.